Massachusetts Security Deposit Laws | Deductions & Rights

Security deposit laws in Massachusetts are primarily governed by MGL Chapter 186, Section 15B one of the most comprehensive and tenant-protective statutes of its kind in the country. This law covers every aspect of how security deposits must be collected, held, documented, and returned. Additional consumer protections are layered in through 940 CMR 3.17, the Massachusetts Attorney General's regulations on landlord-tenant matters.

Effective August 1, 2025, MGL c. 186, § 15B was amended by the FY2026 Budget Act (Acts of 2025, Chapter 9, Sections 54–55), introducing the option for landlords and tenants to agree to a fee in lieu of a security deposit, subject to regulations from the Executive Office of Housing and Livable Communities. Those specific regulations are still being finalized. For now, the traditional security deposit rules remain fully in force, and every Massachusetts landlord and tenant must follow them precisely.

This is one of the clearest rules in Massachusetts security deposit laws, and there are no exceptions. Under MGL c. 186, § 15B(1)(b), a landlord may collect no more than the equivalent of one month's rent as a security deposit regardless of how long the lease runs or how expensive the property is.

At move-in, the maximum a landlord can lawfully require is:

First month's rent

Last month's rent (calculated at the same rate as the first month)

A security deposit equal to one month's rent

The cost of a new lock and key, if applicable

That's it. A landlord cannot charge application fees, amenity fees, community fees, or upfront pet fees under the security deposit statute. Courts have found that disguising an extra charge as a "cleaning fee" or "admin fee" to get around the cap is also illegal. As clarified in Perry v. Equity Residential Management, LLC (U.S. District Court, 2014), a charge that functions as a security deposit must be treated as one regardless of what the landlord calls it.

Also Read: [Massachusetts Landlord Tenant Rental Laws & Rights for 2026](https://www.platuni.com/enterprise-resources/blog-and-insights/massachusetts-tenant-landlord-laws)

Massachusetts security deposit laws are extremely specific about how a deposit must be held and this is where many landlords unknowingly get into trouble.

Separate Interest-Bearing Bank Account ([MGL c. 186, § 15B(3)(a)](https://malegislature.gov/Laws/GeneralLaws/PartII/TitleI/Chapter186/Section15b))

Within 30 days of receiving the deposit, the landlord must place it in a separate, interest-bearing bank account at a Massachusetts bank. The account must be protected from the landlord's creditors, and funds cannot be mixed with the landlord's personal or business money. In Taylor v. Burke, 69 Mass. App. Ct. 77 (2007), the court confirmed that placing a deposit in an out-of-state bank does not comply with the statute.

Provide a Written Receipt ([MGL c. 186, § 15B(2)(b)](https://malegislature.gov/Laws/GeneralLaws/PartII/TitleI/Chapter186/Section15b))

Within 30 days of receiving the deposit, the landlord must give the tenant a written receipt including:

The amount of the deposit

The date it was received

The name of the bank and its location

The account number

A statement that the tenant is entitled to interest on the deposit

Statement of Condition (MGL c. 186, § 15B(2)(c))

Within 10 days of the start of the tenancy, the landlord must provide a written, signed Statement of Condition, a comprehensive list of any existing damage to the property. The tenant then has 15 days to review it, note any additional damage they observe, and return it. This document becomes critical if a deduction dispute arises later, because under MGL c. 186, § 15B, no deduction can be made for damage that was already listed on the statement at move-in unless the landlord can prove it was repaired and later re-damaged by the tenant.

Annual Interest Payments (MGL c. 186, § 15B(3)(b))

If the landlord holds the deposit for a full year or longer, they must pay the tenant annual interest on the deposit either 5% per year, or the actual interest earned by the bank account, whichever is less. The landlord must provide a receipt showing the interest paid. This obligation continues for every year the deposit is held. Interest does not accrue during the final month of the tenancy.

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This is perhaps the most contested area within Massachusetts security deposit laws and the August 2025 Supreme Judicial Court ruling made it even more tenant-protective.

Under [MGL c. 186, § 15B(4)](https://malegislature.gov/Laws/GeneralLaws/PartII/TitleI/Chapter186/Section15b), a landlord may only deduct from a security deposit for:

Unpaid rent or unpaid water charges not lawfully withheld by the tenant

Unpaid increases in real estate taxes are the tenant's responsibility under the lease

Damage to the property caused by the tenant or their guests, beyond normal wear and tear

Those are the only three permitted grounds. Nothing else qualifies.

What Counts as Normal Wear and Tear?

This is the grey area that generates the most disputes. Normal wear and tear refers to the gradual, expected deterioration of a property through ordinary use over time. A tenant who lives in a unit for two or three years will naturally leave some marks on the property and the landlord cannot charge for any of it.

In a landmark decision Peebles v. JRK Property Holdings, Inc., SJC-13702 (August 1, 2025) the Massachusetts Supreme Judicial Court ruled definitively that the security deposit statute does not permit deductions for reasonable wear and tear, and that what qualifies is determined case-by-case based on:

The nature and cause of the condition

The condition of the property at the start of the tenancy

The length of the tenancy

The tenant's reasonable use of the property

Crucially, the SJC also ruled in Peebles that lease clauses requiring tenants to professionally clean the unit upon move-out are per se unenforceable under MGL c. 186, § 15B(4). Landlords who include such clauses and attempt to deduct cleaning costs based on them violate the statute.

Examples of what landlords generally CANNOT deduct:

Repainting walls after a normal-length tenancy

Carpet cleaning after regular use

Minor scuffs, nail holes from hanging pictures, or small marks

Worn door handles, hinges, or weathered fixtures

Examples of what landlords generally CAN deduct:

Large holes in walls

Severely stained or burned carpet

Broken tiles or doors removed from hinges

Pet damage not covered by a separate pet deposit

Deliberate or malicious destruction of property

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Massachusetts security deposit laws set a firm deadline here. Under MGL c. 186, § 15B(4), the landlord must, within 30 days of the tenancy ending:

Return the full security deposit with all accrued interest, or

Provide an itemized written statement of deductions, with documentation supporting each one (receipts, invoices, repair estimates, or an itemized list signed under the pains and penalties of perjury), along with any remaining balance

Failing to return the deposit or provide the itemized statement within 30 days triggers serious consequences under Massachusetts security deposit laws. The landlord forfeits their right to make any deductions at all and must return the full deposit regardless of any actual damage.

Massachusetts security deposit laws come with real teeth. Under MGL c. 186, § 15B(7), certain violations entitle the tenant to triple damages (three times the deposit amount), plus attorney's fees and court costs. The three violations that specifically trigger triple damages are:

Failing to deposit the security deposit into a qualified, separate interest-bearing bank account

Failing to return the deposit or provide a compliant itemized statement of deductions within 30 days of the tenancy ending

Failing to transfer the security deposit to a new owner when the property is sold

Not every technical violation triggers triple damages, as clarified in Phillips v. Equity Residential Management, LLC, 478 Mass. 251 (2017). But the three above do and they're exactly the mistakes landlords make most often.

Tenants who believe their deposit was wrongfully withheld can:

Send a certified letter disputing the deductions

File a complaint in Small Claims Court (for amounts within the monetary limit) or Massachusetts Housing Court

File a complaint with the Massachusetts Attorney General's Office under consumer protection regulations at 940 CMR 3.17

Also Read: [Nevada Security Deposit Laws | Deductions & Rights](https://www.platuni.com/enterprise-resources/blog-and-insights/nevada-rental-deposit-laws)

Almost all but not quite. Under MGL c. 186, § 15B(9), the security deposit statute does not apply to vacation or recreational rentals of 100 days or less. Short-term vacation rentals fall outside its scope. The law also does not apply to foreclosing mortgagees or financial institutions acting as mortgagees in possession under MGL c. 186, § 15B(5).

For the vast majority of standard residential tenancies in Massachusetts, however, MGL c. 186, § 15B applies in full.

Massachusetts security deposit laws are detailed, demanding, and strictly enforced. A landlord who gets even one procedural step wrong, the wrong bank, a missing receipt, a late return can face financial consequences far greater than the deposit itself. At the same time, tenants who know their rights under MGL c. 186, § 15B are in a strong position to recover their money when a landlord falls short.

The most important thing both sides can do is document everything. A signed Statement of Condition, dated photographs at move-in and move-out, copies of every receipt and notice, and a clear paper trail of all communications make security deposit disputes far shorter and outcomes far more predictable.

Security deposit laws in Massachusetts exist to create a fair, transparent relationship between landlords and tenants one where the deposit is genuinely used as protection, not a windfall. Follow the rules, document your steps, and both sides will be far better off.

For tenants who need legal help, Massachusetts Legal Aid provides free legal resources including a complete guide to security deposit law. Greater Boston Legal Services can also be reached at (617) 603-1700.

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